Asian shares surge, dollar strengthens amid inflation concerns

Asian shares surged Thursday, following a tech-led rally on Wall Street. The dollar strengthened as US core inflation exceeded expectations, dampening hopes for a major Federal Reserve rate cut.

Investors turned their attention to the European Central Bank (ECB), expecting a rate cut, with uncertainty around additional cuts in October and December.

EUROSTOXX 50 futures climbed 1.3 per cent, FTSE futures gained 1.1 per cent, and Nasdaq futures rose 0.3 per cent. Asia-Pacific shares outside Japan increased 1.5 per cent, while Japan’s Nikkei jumped 3.3 per cent as a weaker yen boosted sentiment.

The dollar advanced 0.3 per cent to 142.75 yen after earlier pressure from hawkish comments by a Bank of Japan (BOJ) official. The US core consumer price index (CPI) rose 0.28 per cent in August, reducing the chances of a half-point Fed rate cut next week, with the probability now at just 15 per cent.

US tech stocks drove Wall Street higher despite inflation concerns, with Nvidia rising 8 per cent on reports that the US may allow advanced chip exports to Saudi Arabia. Taiwan’s and South Korea’s markets followed, gaining 2.8 per cent and 1.7 per cent, while China’s markets saw minimal movement.

In currency markets, the euro fell to $1.1015, nearing a four-week low. US Treasury yields increased, with the two-year yield edging up 1 basis point to 3.66 per cent.

Oil prices rose due to fears of production shutdowns from Hurricane Francine, with Brent crude up 0.7 per cent to $71.09 a barrel. Gold increased 0.2 per cent to $2,517.89 an ounce.

Attribution: Reuters

Subediting: M. S. Salama